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AutoBuyology 101

 


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"The secret to acting is honesty, if you can fake that you've got it made..." - George Burns

Don't buy a car, go carless, and enjoy carlessnesshood if you can, and save $550,000 over your lifetime
(if you begin carfreedom soon enough - but it is never too late to go carless) of merely average auto related costs. And if you cannot go carless, go CARveat Emptorally -- make the Car-Deal-Literacy-to-Library connection and stop paying too much every time you buy, lease or service an automobile. Paying too much for anything, especially air polluting automoibles is very ungreen!!!
 
Hidden Car Deal Profits

Also See: The True Costs of Driving

and: The Real Price of Gas [The last entry at the bottom of this page also reflects estimated gas and driving associated costs.] [As long as we continue to throw good money after bad for the automobile, without making investments in auto alternatives, even without major natural or cultural perturbations or interventions, we can expect the costs of auto ownership and operation to grow apace.]



AutoBuyology
Ding
the Dealer
and the Manufacturer
on Negotiated Profits

Auto Dealer and Auto Manufacturer profits:
Don't leave the dealership without the consumer's fair share of both!

  • How many times have you heard people boast about how great a deal they obtained on their new car purchase or lease. Oh yeah? They may have gotten the best deal they thought they could under the circumstances, but did they really get that great of a deal? Consider that they likely only negotiated the dealer's take or profit on the deal. Keep in mind that many people mistakenly think they are getting a great deal when they pay the window sticker price. Unfortunately too many people still pay this price without negotiating. This assumes they have not bought a "new" car that the manufacturer, dealer of trucker damaged and repairs prior to sale without disclosures. However, consider that the manufacturer is hiding its profits in the manufacturer's invoice. This is what is often called the dealer's costs.

    Consider that not only has the manufacturer covered all of its costs to make the vehicle including exorbitant executive salaries and pensions, and billions of dollars in national and regional advertising in its invoice price to the dealer, but it also factors in rebates and dealer sales incentives.

    Often a 3% to 5% "holdback" is added into the manufacturer's invoice and is paid to the dealer upon sale of the vehicle, in addition to sales incentives. Add what your friends paid to the dealer on top of the manufacturer's holdback and sales incentives, and you're talking real money for five minutes of often sloppy paperwork and hours of haggling which the dealer drags out to three or four hours to wear down consumers. And keep in mind that many consumers pay $20,000 or more for an $11,000 car.

    Paying 30% to 50% more than any product is worth is not a good deal. Not for toasters, not for toothpaste, and especially not for automobiles. Not even when the dealer or salesperson smiles, shakes your hand and compliments you on how tough or good you are at negotiating price.

    JUST DON'T DO IT!
  • Never disclose your "budget", or how much you can afford to pay per month. Never, never, never. Instead, focus the discussion on the dealer's lowest price, and get the dealer's lowest price quote in writing. Do not let the dealer make you come back with competitive or comparative prices to negotiate. Do not fall for this common car deal trick. Know your budget or how much you can afford , and pick a price approximately 15% to 30% below this amount to begin negotiating up to your "drop-dead-I'm-walking" (with a courteous) smile price. Never let the dealer or salesperson know you are impatient, unless and until you can use this as a guilt manipulative trick to motivate the dealer to sell at your price.
  •  
  • Unless you are negotiating the manufacturer's profit on new car deals, including no-dicker or "value priced" deals, you are paying too much for the vehicle and not getting the best deal possible. And neither are your friends, family or neighbors.
  •  
  • If auto manufacturers are posting record profits (take a bow Mr., Mrs., Ms auto consumer), consumers are not doing their job of negotiating fair manufacturer and dealer profits. Hold dealers and manufacturers to a fair profit and not a dime more.
  •  
  • See other pages of this website for possible ways of getting a piece of the manufacturer's profits on every new car deal. Learn to avoid the dealer's primary weapon against consumers: System Selling. Learn how dealers use System Selling tricks to motivate sales, reverse these tricks into System Buying, and master the car dealer in every new car deal. Where the big profit$ are: = Light (Heavy Profit) Trucks and Sport Utility Vehicles (SUVs) = The GM Suburban is reported to garner for GM at least $15,000 in above costs profits per vehicle. Tip: Negotiate the Manufacturer's Profit on All Light Truck and SUV deals and all other vehicles.
  •  
  • When leasing (not advised) your next new car, be careful to have the dealer quote in writing (have it notarized) the rate of interest you are paying on the lease and specify in writing the credit for any trade in or rebates and other negotiated deal credits. Many states do not require such disclosures which are required on direct loans, and dealers have been ripping off customers on credits for trade-ins and rebates or other negotiated credits. Two thousand or more auto consumers in Florida reported being leased vehicles they thought they were buying and intended to purchase outright. Geez, I guess on person's customer service is another person's rip-off. Hum, must be more of that good old customer service the automobile industry brags about in its advertising. Dealers have been stealing commissions of 3% to 10% or more than the highly inflated MSRP (window sticker price) on many vehicles because of slippery lease agreement forms and non-disclosures of crucial consumer information. Demand full disclosures in writing -- for what its worth...? Negotiate maintenance costs, and early-out costs. Nail all of these down in writing before leasing. Better yet, don't lease, its generally a bad deal for consumers. CARveat Emptor.
  •  
  • "The Hidden Costs of Buying A Car Through Lease Agreements," by Emerald Yeh and Christine McMurry (San Francisco Sunday Examiner - Chronicle Sunday section, July 7, 1996), available at your library perhaps on micro fiche...get your hands on this before even considering buying or leasing a car. Report says people planning to buy a $12,000 Toyota were "sold" a lease costing over $26,000 by a Toyota dealer for the $12,000 Toyota. Some customer service, eh? -- A $12,000 car for $26,000, -- where do we all get jobs like this...? Be particularly wary of "Professionals" in the auto industry not disclosing the lease rate, inflating the price of the lease by the amount of your trade-in and other very sleazy and anti-consumer sales and lease practices. How long are we going to permit this industry to sham the American family on basic personal transportation? Demand Fair Car Sales and Service Practices laws today to protect our friends and families from the raw unprotected sham of unfair, manipulative and fraudulent sales and service practices in the auto industry. Consumers and honest dealers should have not qualms about supporting fairness in auto sales and service practices. Make sure your dealer supports fairness in car sales and service before dealing for a car purchase or lease -- get the dealers support for fairness in writing and send it off to your local, state and national representatives with your demand for consumer protection legislation in car sales and service practices. Now! Beware of lease/purchase deals.
    •  
    • Other hidden costs: (lease payoff costs -- get this in writing up-front)
      Loan interest rates
      Lease interest rates (seldom disclosed voluntarily)
      Undisclosed lease costs (seldom disclosed voluntarily)
      Insurance rates
      Consumer's car buying time (the hassle factor costs)
      Excessive dealer and manufacturer overhead costs
      etc. (make a list)
  •  
  • If you cannot read or understand the dealers contract and deal forms, do not sign any of them. If they favor the dealer or manufacturer over the consumer, negotiate a better agreement. Don't buy cars, but if you do, be a buyer, don't be sold.

    Consider requesting that the dealer complete all of the forms prior to closing the deal, so that you can take them with you to review before signing them, and if possible, have them reviewed by an attorney prior to completing the deal.

    If the vehicle has been out of your sight at anytime between test driving it and signing the contract, re-inspect and retest drive the vehicle and check the VIN (vehicle identification number) to make sure the dealer has not mistakenly or purposefully switched vehicles, or that the vehicle has not been damaged or that items have not been removed from it.

IT'S ONLY MONEY, RIGHT?
Does money matter anymore?

"The cost of gas and subsidizing the automobile": Michael Mechanic on the Opinion Page of the San Francisco Examiner (April 13, 1999) makes the case that auto subsides cost each American man, woman and child an estimated $4,000 (in 1999 dollars) in direct consumer costs and indirect government subsidies of the gas, auto and related industries.

He quotes a "Road Kill" report by the Conservation Law Foundation (CLF) which concluded that motorists paid 40 to 64 cents per mile based on their study of driving costs in Portland, ME and Boston, MA, published in May 1994. Then the CLF studied the less tangible but no less real associated costs of driving which are born or subsidized by all taxpayers [even the carless] including: the costs for infrastructure and maintenance, traffic-related public health and safety services including police and fire; court expenses, energy subsidies, tax breaks to businesses for employee parking, health costs and economic loses related to air pollution, the impact of noise pollution on property values, and impacts of importing foreign oil;--.these added up to between 79 and 94 cents per mile for solo driver's costs in the Boston, MA area.

Mr. Mechanic (his real name) he also quotes "The Price of Mobility," a 1993 report by the National Resources Defense Council (Co-authored by Peter Miller and John Moffet) which computed the national average costs of 38 to 52 cents per mile for all U.S. drivers. The $4,000 per man, woman, and child total costs for auto use in America adds up to $1.2 to $1.6 Trillion ANNUALLY (every year!!!).
Laugh, We're Paying For It!

The amount covered by non-drivers was noted to be between $380 billion and $660 billion yearly. This was calculated to be equivalent to an incremental or unit cost of $3.70 to $6.50 per gallon of gas according to Mr. Mechanic of the report's authors. [Note: in other areas of these pages we note a CEEE estimation of the real costs of gas to be between $5.15 and $15 per gallon compared to the price reflected on the gas pump gauge -- so assuming accuracy of delivery and the posted pump prices, say one big THANK YOU to the non-driving carless who so graciously subsidize the horrendous costs of our auto addictions.]

Mr. Mechanic noted that neither study reflected the economic benefits of driving, nor the harder to derive costs of urban sprawl [which the automobile helped spawn] on our quality of life, resultant loss of farm land and open space, wetlands; health and economic impacts of water pollution from oil spills, stormwater runoff and leaking underground fuel tanks; and the impacts of industries such as mining, chemical and waste operations which support the auto industry and related auto industrial complex.

Last Entry This Page...
[How much more gridlock are we willing to "spring-for" before we decide that more substantive and sustained investment in public transit, trains, and similar auto alternatives is a benefit to all of us, even us auto addicts?] [You may find these estimated costs helpful in calculating your real per tankful monthly, yearly, or lifetime of auto and auto related costs. Compare this cost with the benefits of sitting pretty in gridlock in your inanimate, pollutive shiny thin tin, plastic and glass status and sex symbol.]


Auto Alternatives | Drive Shafts | Dealing With The Dealer
Hidden Profit$ | Consumer Driven Deals | Car Consumer Resources
Auto Industry Cases | Car Deal Repair Kit | My Last VW Mistake
"Ten Reasons" | Lemon Proofing Deals | CARveat's Caveat
You Can Help | CARveat Emptor Flyer | VW Junkyard | Links
My Other Car Not A VW | Legislative Alerts | Dodging Chryslers
Mini Van Junkyard | Activist Flyers True Costs of Driving | Car Deal Illiteracy
15 Sec. Car Deal Lecture | Parallel Parking | Test-I-Moanials


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CARveat Emptor - Tricks of the Great American Car Deal ©
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AutoBuyologist)
© copyright 1995-2012, R. Rand Knox. All Rights Reserved.
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Happy motoring, wheeling & dealing
-- virtually and really. Or Not!




 

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What's In You?
What's In Your Cells?
GOT ASTHMA?
Yet?
GOT WAR FOR OIL?
GOT TOXIC LOADING?
GOT GLOBAL WARMING?
GOT EXPENSIVE FOSSIL FUELS?
Have you told your auto maker, or the auto industry to make more efficient and cleaner-air vehicles? Recently? (Flyer to copy and post). Have you asked others if they have? It wouldn;t kill you to do so! It may even help prevent or reduce asthma and global warming.


For Healthier Air, Planet, & People: To Save Y'our Breath, Lives, Money & Planet...

Tell Car Makers To Make Cleaner-Air Vehicles
1 Jump Start Ford For A Cleaner-air Future

2 Jump Start Ford
Tell NHTSA to Improve Fuel Efficiency of SUVs
Tell Car Makers To Get Their Gas In Gear Flyer 2-up

Save Your Breath, Life, Money & Planet Flyer 1-up
Don't Be A Fossil Fool - Fossil Fools Day


Car Deal Literacy Self-help - Auto Consumer Resources:

Troop Support - Up-armored Car Deals
Real Conservatives Conserve
(The money you save may be your own.)




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